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Telstra Fined $18 Million

Telstra has been fined over $18 million dollars in the Federal court after admitting it was refusing access to other telecommunications providers in seven key metropolitan exchanges in Perth, Melbourne, Adelaide and Brisbane for the connection of their broadband equipment, after being taken to task by the Australian Competition and Consumer Commission.

Telstra has been fined over $18 million dollars in the Federal court after admitting it was refusing access to other telecommunications providers in seven key metropolitan exchanges in Perth, Melbourne, Adelaide and Brisbane for the connection of their broadband equipment, after being taken to task by the Australian Competition and Consumer Commission.

Justice Middleton said that Telstra had shown ‘no true remorse’ for its conduct, ‘nor an appreciation of the seriousness of the admitted contravention.’

Telstra maintained to the companies seeking access that the main distribution frames in these exchanges were “capped”, where in fact, there was capacity or it could have been made available.

In handing down today’s decision, Justice Middleton noted that Telstra was in an overwhelming position of bargaining strength and “has control over its exchanges and the power to allow or refuse access”.

He found that in the period from 2006 to 2008: “Telstra took no steps to develop a culture of compliance with its access obligations under the Trade Practices Act and the Telecommunications Act.”

The ACCC had put a penalty of $40m to the court while Telstra submitted that the appropriate penalty was in the order of $3-5 million. The total penalty imposed by the court was $26.5 million, however Justice Middleton gave Telstra a 30 per cent discount for cooperation, acceptance of responsibility and for implementing a compliance program.

ACCC chairman Graeme Samuel said the ACCC welcomed the substantial penalty imposed on Telstra by the court.

“The penalties imposed make it clear that large companies need to ensure they comply with their legal obligations,” he said. “The ACCC was of the view that Telstra had engaged in serious conduct in breach of the Trade Practices Act and the Telecommunications Act. The ACCC’s decision to pursue high penalties in this matter has been vindicated.

“The purpose of access obligations is to encourage downstream competition for the benefit of consumers. The failure to comply with those obligations impedes that competition and therefore harms consumers.’

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